Virginia high court held that an insurer had no obligation to cover the legal fees incurred by a city that successfully defended itself against a bodily injury claim. Since the bodily injuries in question were not covered by the insurance policy, there was no right to collect coverage for legal fees spent on the defense.

Topic

Insurance

Key Words

Coverage; Legal Fees; Bodily Injury

C A S E
S U M M A R Y

Facts

Over 200 plaintiffs sued the City of Chesapeake (Virginia), contending they suffered miscarriages between 1984 and 2000 due to exposure to trihalomethanes in the city water system. The claims were barred by sovereign immunity. The city then demanded its insurer pay the $2.4 million in legal fees spent on that matter. The federal district court certified a question to the Virginia high court, asking if, under Virginia law, the insurer would be liable for these expenses.

Decision

The legal fees are not covered in the bodily injury insurance policy held by the city because the claim against the city was based upon injury suffered from the discharge of pollutants. Such discharges and resultant injuries were excluded from coverage by the policy, hence legal fees related to such claims would not be covered either.